Chainalysis: Coronavirus is destroying the two largest crypto scams

Original title: Coronavirus is crushing the two biggest crypto scams, says Chainalysis

Author: Amy Castor

Translator: Typto

Translation agency: DAOSquare

Since the beginning of March, the profits of Ponzi schemes and investment schemes have fallen by 33%.

According to the analysis of CHAINALYSIS data, coronavirus has negatively affected the two biggest secret scams

Picture from: SHUTTERSTOCK


  • Most of the income of crypto scammers comes from Ponzi schemes and investment scams.
  • But since the COVID-19 crisis broke out, they have been suffering.
  • This is because their strategy cannot adapt to the volatility of BTC prices.

Undeniably, the new crown virus has created some new opportunities for crypto scammers. But when it comes to the two most profitable industries, the Ponzi scheme and the investment scheme, the new crown is stifling their business.

The news came from a report released by Chainalysis on Friday. According to data from the blockchain analysis company, since the new crown virus began to sweep the Western world in early March, the average amount of money obtained from such scams has fallen by 33% each week, from $ 4.2 million to less than $ 2.9 million.

These numbers seem to contradict some previous reports that suggest that COVID-19 has opened the door for scammers, but if crypto fraudsters have so many new opportunities, why do they make less money?

According to Chainalysis, this popular virus mainly creates opportunities for e-mail scams (such as phishing scams and extortion scams), and these scams do not require a lot of startup capital costs.

In these scams, scammers use epidemics to fabricate new stories, trying to trick people into sending them money. In one case, a fraudster asked the victim to donate cryptocurrency to help the disease control center fight the epidemic. Another case was a fraudster who claimed to have the disease. He threatened that unless the other party gave him Bitcoin, he would spread the disease to the other family. But obviously, people are not fooled.

The Chainalysis Research Institute said: "This is a terrible development in times of crisis, but in our investigation, there were few digital currency remittances around the Covid-19 scam, which shows that these scams have not been very successful."

Even during the outbreak, the most profitable crypto scams were still investment scams and Ponzi schemes, not blackmail and phishing scams in the name of coronaviruses. The researchers said that these two sub-categories accounted for the vast majority of all crypto fraud (95%).

Why did their profits fall instead? According to the report, because usually, fraudsters will ask the victims to provide the same, fixed amount (such as 0.2 BTC) in all their activities. However, the price of Bitcoin fell off the cliff last month. According to the data of Coinmarketcap, from 8500 US dollars in early March to 6500 US dollars at the end of this month.

"We think that scammers still get the same amount of digital currency from roughly the same number of victims every month, but because of the decline in cryptocurrency prices, their value becomes lower and lower.", Chainalysis said, " On the other hand, since the financial crisis intensified in early March, the value of the local currency received by most fraud cases every day is still equal or even higher. "

So why blame the coronavirus? Because in uncertain times, investors usually do this. They withdraw funds from turbulent assets (digital currency) and transfer them to legal assets, which causes the price of digital currency to fall. Facts have proved that scammers are suffering like others.